JAKARTA. Within a two weeks period, government booked a worth of Rp 14.10 trillion of order for ORI013 series of State Retail Bonds. It is expected that the order will hike at the end of offering period, thanks to the shift in investment from the old series of Bonds of Republic of Indonesia (ORI), which will mature in immediate time.
Director of State Bonds Affairs at Directorate General of Funding and Risk Management (DJPPR) at Ministry of Finance Loto Srinaita Ginting said that as of 12 Oktober 2016 government had secured a worth of Rp 14.10 trillion of order for ORI013. The amount is equal with 70.50% of Rp 20 trillion of ORI013 issuance.“The government is optimistic to meet the target,” he said.
During the offering period, one of the sales agents PT Bank Mandiri found the high demand for ORI013. Director of Consumer Banking at Bank Mandiri Hery Gunardi said that as of 11 October 2016 the bank had secured a worth of Rp 1.6 trillion of order for ORI013. The number has surpassed a worth of Rp 1,55 trillion of order target. Most of the orders come from Jakarta.
According to Hery, the high demand was driven by the prediction that bank saving interest rate will shrink. Therefore, an offer for 6.6% of ORI013 coupon rate became attractive.
Another ORI013 sales agent PT Trimegah Securities Tbk also claimed to meet the sales target. “We built partnership with sales agents,” said President Director of Trimegah Securities Stephanus Turangan.
However, some ORI013 sales agents are struggling to meet the sales target. Consumer Director at Bank Rakyat Indonesia (BRI) Sis Apik Wijayanto said that as per 10 October 2016 just booked a worth of Rp 318 billion, or only 35% of Rp 908.5 billion of total ORI013 sales target. Most of the investors come from Jakarta, Surabaya, Makassar, and Medan.
According to Sis Apik, with the low coupon rate, ORI0 13 is less attractive compared to the previous serie of ORI. Let alone, multi funds with 8% of average rate is still circulating in market.
Senior Research Analyst at pasardana.id Beben Feri Wibowo said that the low coupon rate has caused ORI013 to become less attractive. In addition to the low coupon rate, the low demand for ORI013 was driven by the sluggish bond market. At the end of 2016, the result of the United States of America (the US) presidential election and the speculation on the rise of The Fed’s rate may affect to ORI013 demand.
Meanwhile, some investors still keep their funds in ORI010, which will mature on 15 October 2016. Usually, some retail investors will reinvest their funds in the new serie of ORI. Based on the assumption, Beben predicts that the order of ORI013 will just hike during the last week of the offering period, which runs from 29 September 2016 to 20 October 2016. (Translator: Muhammad Farid)
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